California launches $3,500 EV rebates for first-time buyers

California launched a $3,500 rebate for first-time buyers of new electric vehicles, an instant discount that can cut an eligible $50,000 car to $46,500 before taxes, fees and financing. Used EV buyers can claim $1,750 on cars priced up to $25,000, leaving a secondhand purchase at $23,250 before insurance, charging and loan costs are added.

The program carries a $270 million price tag and is funded by the state budget and automakers. The rebate is the centerpiece of a broader $600 million package, and it will begin later this summer as a point-of-sale incentive at the dealership. The rebates are aimed at first-time zero-emission vehicle buyers, with participating automakers to be announced later.

The move comes after President Donald Trump signed legislation last year ending the federal $7,500 EV tax credit and the $4,000 used-EV credit. California is filling part of that gap in the nation’s largest auto market, where electric vehicles accounted for about 20% of new car sales last year and Tesla made up almost half of that total. Gavin Newsom signaled in November 2024 that California would restart a state rebate if the federal credit disappeared.

California’s bet on EVs runs deeper than one incentive check. California’s zero-emission vehicle rules have been in place since 1990, and the state’s long-term target is for all new cars, SUVs and pickup trucks sold in the state to be zero-emission by 2035. The earlier Clean Vehicle Rebate Project closed on November 8, 2023, after the state invested about $1.49 billion, funded more than 586,000 vehicles and directed 42% of the money to priority populations.

The new structure is narrower than the old statewide rebate system it follows. Qualifying vehicles must meet price caps and income limits, and participating automakers will be disclosed in August.